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Monday, March 16, 2009

Equity Trader Alert #2009 - 16
NASDAQ OMX BX Introduces Rebate for Removing Liquidity Effective April 1, 2009

Markets Impacted:

  • NASDAQ OMX BX

Contact Information:

What you need to know:

  • Effective Wednesday, April 1, 2009, NASDAQ OMX BX (BX) will rebate firms for removing liquidity for Tape A and Tape C securities, upon filing with the SEC.
  • New pricing reduces trading costs for liquidity takers and provides better order exposure to liquidity providers.
  • One month ago, BX was trading 11 million shares per day. Now it is matching more than 40 million shares per day and growing. We encourage firms to route to BX to take advantage of the aggressive quoting at the NBBO.

What are the pricing changes?

Effective Wednesday, April 1, 2009, upon filing with the Securities and Exchange Commission (SEC), NASDAQ OMX BX® (BX®) plans to introduce a rebate for removing liquidity in Tape A and Tape C securities. There will be no rebate for adding liquidity in Tape A or Tape C.

Effective Wednesday, April 1, 2009, the BX fee schedule will be as follows:

Tape A and Tape C(Per Share Executed)
Rebate to Remove Liquidity (displayed and non-displayed)$0.0006
Tape B(Per Share Executed)
Rebate to Add Liquidity (displayed and non-displayed)$0.0020
Fee to Remove Liquidity $0.0014
  • There will be no rebate for any shares that execute below $1.00.
  • Orders executed with a share price below $1.00 will be charged 0.1% (i.e., 10 basis points) of total dollar volume of the transaction to remove liquidity.

Is pricing for Tape B changing?

No, the fee schedule for Tape B securities remains unchanged, including the low remove rate of $0.0014 per share.

Why is BX making this change?

BX is responding to industry concerns that the overall cost to access liquidity has increased. Firms have asked for a market center with superior technology to offer a low-priced alternative for removing liquidity.

What are my savings?

For every million shares of liquidity you remove in Tape A or Tape C securities, you will save more than $3,000*.

How can I take advantage of these cost savings opportunities?

Put BX first on your routing table because it’s the fastest and least expensive exchange for trading all U.S. equities. For routers that “ping” destinations, firms may want to attempt to execute on BX prior to routing elsewhere to take advantage of the speed of INET technology and the cost savings.

If your firm is not currently a member of BX, please visit our Membership page to apply for membership.

Where can I get additional information?

*Based on a comparison of BX's rebate to remove to the next least expensive exchange’s remove rate of $0.0025.


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